Morningstar names CEO to succeed Mansueto

Morningstar named Kunal Kapoor as its next CEO, elevating an executive who has made his career at the Chicago investment research company since emigrating from India to attend college in Illinois.

As Kapoor, 41, becomes CEO, Morningstar founder Joe Mansueto, 60, will give up that post but add "executive" to his chairman title. Both moves take effect Jan. 1, according to a statement from Morningstar.

Photo

Todd Winters

Joe Mansueto

"As I turn 60, I'm ready to transition to an executive chairman role," Mansueto said in the statement. "I love the company as much as I did when I started it in 1984 and am just as excited by our prospects as ever.” He said he believes the company is in “strong shape.”

Mansueto told employees in a memo today that he'll remain a “large shareholder” and has “no plans to sell any of my shares in Morningstar.” He currently owns 24.4 million shares, or about a 57 percent stake in the company as of March 1, according to a filing with the Securities and Exchange Commission.

In an interview, he said he looks forward to freeing his calendar to do more open-ended thinking about the company's strategy and about technology. At the moment, he doesn't have any other corporate plans with respect to Morningstar or the other industries he's dabbled in, such as his ownership of media companies, including Inc. and Fast Company.

In the memo, he also assured the company's 4,000 employees he will keep his desk on the eleventh floor of Morningstar's Chicago headquarters. He expects he'll still meet with Kapoor on a weekly basis and be in touch by phone or email even more frequently.

“My big focus is still Morningstar and to make sure Morningstar is growing,” said Mansueto, who turned 60 on Sept. 3.

SHARPEN, NOT SHIFT STRATEGY

His successor doesn't have any big alterations in mind for the company, he said in an interview.

“My desire now is not to change the strategy,” said Kapoor, who has experience in many different departments of the company, from software products to international operations. “We just need to continue to sharpen the way we execute.”

Both Kapoor and Mansueto said they expect the U.S. Department of Labor's recent decision requiring financial advisers to take on a fiduciary responsibility in overseeing clients' assets to advance Morningstar's business. The company has been making inroads in selling its research, data and other services to those advisers.

While he says his international roots likely will be a benefit in leading the company, Kapoor doesn't expect to overemphasize Morningstar's international prospects. “Opportunities in the US are as strong as the opportunities overseas,” he said in the interview.

Kapoor grew up in Calcutta and moved to the US when he was 18 to attend Monmouth College in western Illinois. He and Mansueto have bonded over their stock-picking conversations, Mansueto said, noting that Kapoor is even more of a value investor than he is and not afraid to be contrarian in his choices.

The board approved the management changes today, Kapoor said. He was named president of the company in 2015 after joining as a data analyst in 1997. He will also become a member of the company's board of directors.

Longtime executive and onetime CEO Don Phillips will leave the board, though he will remain at the company as a managing director. Phillips led the company for a couple years in the late 1990s before Mansueto reclaimed the CEO title in 2000.